Purdue analysis finds H2Bioil biofuel could be cost-competitive when crude is between $99–$116/barrel

5 June 2012

The Purdue University-developed fast-hydropyrolysis-hydrodeoxygenation process for creating biofuels—H2Bioil (earlier post)—could be cost-competitive when crude oil prices range from $99 to $116 per barrel, depending upon the source of hydrogen, the cost of biomass and the presence or absence of a federal carbon tax, according to a new study by the Purdue team. Their analysis is published in the journal Biomass Conversion and Biorefinery.

H2Bioil is created when biomass, such as switchgrass or corn stover, is heated rapidly to about 500 °C in the presence of pressurized hydrogen. Resulting gases are passed over catalysts, causing reactions that separate oxygen from carbon molecules, making the carbon molecules high in energy content, similar to gasoline molecules.

This paper contains a comprehensive financial analysis of the H2Bioil process with hydrogen derived from different sources. Three different carbon tax scenarios are analyzed: no carbon tax, $55/metric ton carbon tax and $110/metric ton carbon tax. The break-even crude oil price for a delivered biomass cost of $94/metric ton when hydrogen is derived from coal, natural gas or nuclear energy ranges from $103 to $116/bbl for no carbon tax and even lower ($99–$111/bbl) for the carbon tax scenarios.

This break-even crude oil price compares favorably with the literature estimated prices of fuels from alternate biochemical and thermochemical routes. The impact of the chosen carbon tax is found to be limited relative to the impact of the H2 source on the H2Bioil break-even price. The economic robustness of the processes for hydrogen derived from coal, natural gas, or nuclear energy is seen by an estimated break-even crude oil price of $114–126/bbl when biomass cost is increased to $121/metric ton.

—Singh et al.

The conversion process was created in the lab of Rakesh Agrawal, Purdue’s Winthrop E. Stone Distinguished Professor of Chemical Engineering. Singh says H2Bioil has significant advantages over traditional standalone methods used to create fuels from biomass, including higher yields. Once the process is fully developed, due to the use of external hydrogen, he expects the yield to be two to three times that of the current competing technologies.

The economic analysis finds that the energy source used to create hydrogen for the process makes the difference when determining whether the biofuel is cost-effective. Hydrogen processed using natural gas or coal makes the H2Bioil cost-effective when crude oil is just over $100 per barrel. But hydrogen derived from other, more expensive, energy sources—such as nuclear, wind or solar—drive up the break-even point.

We’re in the ballpark. In the past, I have said that for biofuels to be competitive, crude prices would need to be at about $120 per barrel. This process looks like it could be competitive when crude is even a little cheaper than that.

Agrawal and colleagues Fabio Ribeiro, a Purdue professor of chemical engineering, and Nick Delgass, Purdue’s Maxine Spencer Nichols Professor of Chemical Engineering, are working to develop catalysts needed for the H2Bioil conversion processes. The method’s initial implementation has worked on a laboratory scale and is being refined so it would become effective on a commercial scale.

The model Tyner used assumed that corn stover, switchgrass and miscanthus would be the primary feedstocks. The analysis also found that if a federal carbon tax were introduced, driving up the cost of coal and natural gas, more expensive methods for producing hydrogen would become competitive.

The U.S. Department of Energy and the Air Force Office of Scientific Research funded the research. Agrawal and his collaborators have applied for a US patent for the conversion process.

Comments

"Purdue analysis finds H2Bioil biofuel could be cost-competitive when crude is between $99–$116/barrel"

Over the years, a number of such articles have crossed this site. If true, the Feds should contract this rate + 5% and have a "cap" domestic replacement fuel for when our enemies double our import oil prices.

The oil problem isn't just the 1.5X or 2X today's oil price next month, it's the 1000% hikes since the first OPEC embargo and inability to accurately budget any reasonable future transportation fuel costs.

The Senators, Representatives, energy CEOs, etc that put America in this oil mess, despite 35 years, should have their compensation/pensions reduced in proportion to the percentage of oil hikes "during their watch"(and million dollar pay).

No Kelly. They are more like Air Canada CEO who got 2X pay when deficit doubled. It then took a Federal Government Special law to stop pilots and other employees to get a raise. Nobody mentioned that the CEO was granted a cash 100% raise/bonus. He refused 100,000 Options because they are about worthless with Share price as low as $0.87.

No farmer will provide this at that price, should be doubled/tripled or they will just plant hay. I guess it may be possible if you used convict labor, condemned land in Detroit and lots of Federal grants.

Beetle killed pine trees might be a different story, the energy density is higher.

Also, because Joe Sixpack can see billionaires donate these huge sums (as a result of the "Citizens United" ruling) he no longer sees a need to donate himself: Only 4% of Americans donated any money to political campaigns in 2008;
http://www.acrreform.org/research/money-in-politics-who-gives/
And that will drop to 2% this year.
http://www.opensecrets.org/overview/donordemographics.php